Groupon LivingSocial Problem -- Local Business Promotion Through Daily Deal Sites May Collapse Your Business - Part II

Less Online Traffic and Links – daily deals aggregators definitely increase the foot traffic in the merchant establishments. But is unable to provide more traffic toward in the business’s web site. Where as, a normal PPC or other online advertisement campaign can do for you. Conventional online advertisement campaign may generate less foot traffic for merchant establishment, but it can generate more traffic on business’s website, not only that, daily deal aggregator sites generate business lead for very short period, where as traditional advertisement campaign generate business lead for lifetime.

Proposed Solution – they only possible way to defeat the issue is, apart from the daily deal advertisement, continue the other online marketing strategy through out the year. This only helps the business to get the quality and returning customers for long time.

Hiring More Employees – when a business start advertising with the daily deal aggregators, right away, the business will get the business leads; Due to heavy workload. To maintain the proper quality of the product and services, the business needs more employees to satisfy the customer’s need. Recruiting new employees is not a simple task. The task involves – job listing, interview, training for the employees as well as those process involves huge amount of extra-cost and take some time to get the perfection from them.

Proposed Solution – If the business not having the enough manpower; the recommended solution is – try to get the employees in ad-hoc basis with low cost and before doing that create a team for recruiting those staffs on ad-hoc basis.

Poor Profit Margins – for the sake of advertisement and huge foot traffic in merchant establishment, business owners can sacrifice their profit. But the break-even is accepted, because the daily deal
can only provide the 25% of the profit, because the other part of the discount will take by the daily deal site as their credit. A recent study conducted by Rice University discovers some shocking truth about the actual profitability of a GroupOn campaign. According to researchers, a significant percentage (32%) was not profitable. Another biggest issue is – nearly 25% of the coupon actually
redeemed and only 15% is the rate of returning customer. That is – only 15% of customer interested to get the coupon and redeem it.

Proposed Solution – As mentioned earlier, create a stone hedge on the price, before launching the campaign.

Short Lived Exposure – daily deals aggregators will only provide the business leads for few days. After those days, the business comes into the regular competition with extra overheads, that also
harmful for the entire business structure as well as the employees too.

Proposed Solution – as mentioned earlier, only regular-basis online advertisement campaign (Traditional advertisement campaigns like – PPC and others…) can give the perfect result.